Kosmos Energy (KOS) risk factors, FY2024 10-K

Other

1. 01Our Oil and Natural Gas Operations
2. 02Our Business and Financial Condition

Risks Relating to our Oil and Natural Gas Operations

1. 03We have limited proved reserves and areas that we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all
2. 04We face substantial uncertainties in estimating the characteristics of our discoveries and our prospects
3. 05Drilling wells is speculative, often involving significant costs that may be more than we estimate, and may not result in any discoveries or additions to our future production or reserves. Any material inaccuracies in drilling costs, estimates or underlying assumptions will materially affect our business
4. 06Development drilling may not result in commercially productive quantities of oil and gas reserves
5. 07Our identified drilling and infrastructure locations are scheduled out over time, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling or infrastructure installation or modification
6. 08The inability of one or more third parties who contract with us to meet their obligations to us may adversely affect our financial results
7. 09The unit partners’ respective interests in the Jubilee Unit and Greater Tortue Ahmeyim Unit are subject to redetermination and our interests in each such unit may decrease as a result
8. 10Our estimated proved reserves are based on many assumptions that may turn out to be inaccurate. Any significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves
9. 11The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated oil and gas reserves
10. 12We may not be able to commercialize our interests in some of the natural gas produced from our license areas
11. 13Our inability to access appropriate equipment and infrastructure in a timely manner may hinder our access to oil and natural gas markets or delay our oil and natural gas production
12. 14We are subject to numerous risks inherent to the exploration and production of oil and natural gas
13. 15We are subject to drilling and other operational and environmental risks and hazards
14. 16Our operations may be materially adversely affected by weather-related events, including, but not limited to, tropical storms and hurricanes, and the physical effects of climate change
15. 17The development schedule of oil and natural gas projects, including the availability and cost of drilling rigs, equipment, supplies, personnel and oilfield services, is subject to delays and cost overruns
16. 18Our offshore and deepwater operations involve special risks that could adversely affect our results of operations
17. 19We had, and continue to have, disagreements with certain host governments and contractual counterparties regarding certain of our rights and responsibilities and may have future disagreements with our host governments and/or contractual counterparties
18. 20The geographic locations of our licenses in Africa and the Gulf of America subject us to a risk of loss of revenue or curtailment of production from factors specifically affecting those areas
19. 21For example, oil and natural gas operations in our license areas in Africa may be subject to higher political and security risks than those operations under the sovereignty of the United States

Risks Relating to our Business and Financial Condition

1. 22A substantial or extended decline in both global and local oil, natural gas and LNG prices may adversely affect our business, financial condition and results of operations
2. 23Our business plan requires substantial additional capital, which we may be unable to raise on acceptable terms or at all in the future, which may in turn limit our ability to develop our exploration, appraisal, development and production activities
3. 24We face various risks associated with increased activism against, or change in public sentiment for, oil and gas exploration development, and production activities and ESG considerations, including climate change and the transition to a lower carbon economy
4. 25Outbreaks of disease may adversely affect our business operations and financial condition
5. 26Deterioration in the credit or equity markets could adversely affect us
6. 27We may incur substantial losses and become subject to liability claims as a result of future oil and natural gas operations, for which we may not have adequate insurance coverage
7. 28Slower global economic growth rates may materially adversely impact our operating results and financial position
8. 29Increased costs and availability of capital could adversely affect our business
9. 30Our derivative activities could result in financial losses or could reduce our income
10. 31Provisions of our Senior Notes and Convertible Senior Notes could discourage an acquisition of us by a third-party
11. 32Our level of indebtedness may increase and thereby reduce our financial flexibility
12. 33We are a holding company and our ability to make payments on our outstanding indebtedness, including our Senior Notes and Convertible Senior Notes, is dependent upon the receipt of funds from our subsidiaries by way of dividends, fees, interest, loans or otherwise
13. 34We may be subject to risks in connection with acquisitions and the integration of acquisitions may be difficult
14. 35If we fail to realize the anticipated benefits of acquisitions, our results of operations may be adversely affected
15. 36A cybersecurity incident, including a breach of digital security, could result in information theft, data corruption, operational disruption, and/or financial loss
16. 37Our ability to utilize net operating loss carryforwards may be subject to certain limitations

Risks Relating to Regulation

1. 38Our business, operations and financial condition may be directly and indirectly adversely affected by political, economic, and environmental circumstances, and changes in laws and regulations, in the countries and regions in which we operate
2. 39More comprehensive and stringent regulation in the Gulf of America has materially increased costs and delays in offshore oil and natural gas exploration and production operations
3. 40The oil and gas industry, including the acquisition of exploratory licenses, is intensely competitive and many of our competitors possess and employ substantially greater resources than us
4. 41Participants in the oil and gas industry are subject to numerous laws, regulations, and other legislative instruments that can affect the cost, manner or feasibility of doing business
5. 42We are subject to numerous health, safety and environmental laws and regulations which may result in material liabilities and costs
6. 43successor liability for FCPA violations committed by companies in which we invest in (for example, by way of acquiring equity interests in, participating as a joint venture partner with, acquiring the assets of, or entering into certain commercial transactions with) or that we acquire
7. 44Federal regulatory law could have an adverse effect on our ability to use derivatives to reduce the effect of commodity price, interest rate and other risks associated with our business
8. 45We are dependent on certain members of our management and technical team
9. 46Some of the jurisdictions within which we operate have proven to be litigious environments. Oil and gas companies, such as us, can be involved in various legal proceedings, such as title or contractual disputes, in the ordinary course of business
10. 47We face various risks associated with global activism
11. 48Our share price may be volatile, and purchasers of our common stock could incur substantial losses
12. 49Holders of our common stock will be diluted if additional shares are issued